Robust Q4 needed to meet 2016 GDP goal

Update:
October, 18/2016 - 10:07

|

Photo shows a corner of HCM City’s Sài Gòn Port. The economic growth rate in the fourth quarter of 2016 must be much higher than that of previous months in order to achieve this year’s targeted GDP growth, the Government said yesterday. — VNA/VNS Photo Thanh Vũ

HÀ NỘI – The economic growth rate in the fourth quarter of 2016 must be much higher than that of previous months in order to achieve GDP growth set for this year, the Government reported to the National Assembly Standing Committee (NASC) yesterday.

The Government said in its report submitted to the fourth session of the NA Standing Committee that the 6.7 per cent increase in GDP, targeted by the NA in 2016, is unlikely to be met and the economic growth rate for this year is estimated to be 6.3-6.5 per cent.

The NA Standing Committee said even the revised estimated growth rate would not be achieved without drastic and synchronous Government measures.

The NA Committee for Economics urged the Government to immediately address the long delay between the promulgation and implementation of policies, while continuing with efforts to remove barriers for businesses. The committee stressed the need to tighten the management of the State budget and public investment projects, and ensure administrative discipline and order.
The Government should also push ahead with economic restructuring, especially in public investment, commercial banks, and State-run businesses.
The NASC commended the Government on its measures to support businesses in terms of market and credit access.
Nevertheless, the high rate of bad debts, the weak performance of some commercial banks, and the high government bond interest rates have made it difficult to lower lending interest rates.
Some deputies expressed concern that public debts could breach the 65 per cent of the GDP limit in 2016 while the increasing disbursement of official development assistance (ODA) capital will disrupt the budget spending estimate and raise the State budget deficit.
The head of the NA Economic Committee, Vũ Hồng Thanh, urged the Government to make a more detailed macro economic assessment in order to understand why the annual growth target will not be met.

Increasing basic salary

Also yesterday, members of the National Assembly’s Finance and Budget Committee suggested the Government increase the basic monthly salary by 7 per cent to VNĐ1.3 million (US$59) in 2017.

The salary rise should be coupled with streamlining and rearranging the State apparatus personnel and improving productivity, they noted, asking the Government to take into consideration which resources could be pooled for the scheme.

The Government estimated that the 2017’s State budget deficit would account for 3.5 per cent of GDP. The head of the committee, Nguyễn Đức Hải, assessed that the deficit should be kept at that level as it can ensure the safety of public debts between 2017 and 2020. According to the Cabinet, the total revenue for this year’s State budget is expected to be 2.4 per cent higher than the estimate, approximately by VNĐ24.5 trillion (US$1.1 billion). Revenue from crude oil is expected to reach only 72.5 per cent of the estimate.

The budget deficit is estimated at VNĐ254 trillion ($11.54 billion), the same amount decided by the National Assembly; of which public, government and foreign debts make up 64.98 per cent, 53.1 per cent and 45.7 per cent of the GDP, respectively.
In the morning, NA Chairwoman Nguyễn Thị Kim Ngân launched a fundraiser in support of residents in the central region hard hit by devastating rains and floods. - VNS